Transfer of Assets to Shareholder’s Child: Shareholder Benefit

Transfer of Assets to Shareholder’s Child: Shareholder Benefit

A January 5, 2026 Court of Quebec case considered whether a corporation’s sale of a cottage to the shareholder’s sons resulted in a denied capital loss to the corporation and a taxable shareholder benefit. In 2015, the corporation sold a cottage that it had constructed for $1,248,821 to the shareholder’s sons for $700,000. Following an audit, Revenu Québec (RQ) denied the corporation’s capital loss of $406,934 on the basis that the cottage was personal-use property.…

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Importance of Strong Internal Accounting: Gross Negligence Penalties

Importance of Strong Internal Accounting: Gross Negligence Penalties

A January 6, 2026 Tax Court of Canada case reviewed assessments of unreported revenues of over $6.4 million over two taxation years, 2013 and 2014. These amounts were determined through bank deposit analysis by CRA. Over $1.7 million of the amount resulted from failure to translate revenues denominated in foreign currency to Canadian dollars. The court noted that CRA’s use of average foreign exchange rates to calculate the difference was reasonable. CRA reassessed outside the…

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Trucking Sector: New Reporting Obligations

Trucking Sector: New Reporting Obligations

To address perceived tax non-compliance in the trucking sector, CRA announced that penalties will now apply when businesses in the trucking industry fail to file T4A slips reporting fees for services (Box 048) exceeding $500 paid to CCPCs (Canadian-controlled private corporations) in the trucking industry, commencing for the 2025 calendar year. CRA indicated that a business will be considered to be operating in the trucking industry if more than 50% of its primary source of…

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Short-term Rentals: Denial of Expenses

Short-term Rentals: Denial of Expenses

In late 2023, the Federal government announced its intention to deny income tax deductions for expenses by non-compliant operators of short-term rental properties (such as Airbnb or VRBO properties rented for periods of less than 90 days). These rules would apply to individuals, corporations and trusts with non-compliant short-term rentals.These rules are proposed to come into effect on January 1, 2024. A short-term rental would be non-compliant if, at any time, either: the province or…

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Business Receipts: What is Sufficient?

Business Receipts: What is Sufficient?

In a recent Tax Tip, CRA stated that an acceptable receipt for income tax purposes must contain all of the following: the date of the purchase; the name and address of the seller; the name and address of the buyer; the full description of the goods or services purchased; and the vendor’s business number if the vendor is a GST/HST registrant. Credit card statements are not generally acceptable unless they contain all the above information.…

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GST/HST Returns: Mandatory Electronic Filing

GST/HST Returns: Mandatory Electronic Filing

For reporting periods that begin in 2024 and onwards, GST/HST registrants (except charities and selected financial institutions) must file all GST/HST returns with CRA electronically.Registrants who file their GST/HST returns on paper are subject to a penalty of $100 for the first offense and $250 for each subsequent return not filed electronically. While CRA waived these penalties for monthly and quarterly filers who failed to file returns electronically for periods beginning before March 31, 2024,…

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